Convenience Cuisine

With creativity and hospitality, Nice N Easy enters the next phase of foodservice.

JohN MacDougall isN’t Much of a fooDie. He had his first taste of Kobe beef a few weeks ago. He doesn’t know what the term “terroir” means.

Yet, just recently, he unleashed three white-jacketed chefs onto his stores, toques and all. One guy won him over with beef-cheek ravioli and braised pork belly.

In five months, these culinary connoisseurs have rolled out an indulgent line of gourmet grilled-cheese sandwiches and started work on a home-meal-replacement program at MacDougall’s 81 Nice N Easy Grocery Shoppes in upstate New York. Refreshed grab-and-go salads are given so much attention—color, texture and position of every ingredient carefully considered—that they give the salads at a nearby Wegmans serious competition. Quite a compliment.

And whenever the chefs are in a store, sales climb.

MacDougall’s foodservice recipe for success seems simple enough: Hire, train, purchase, benchmark and innovate like a restaurant. The tactic has delivered double-digit foodservice sales growth every year for nearly a decade.

But ask any retailer who’s visited Nice N Easy and tried to replicate the company’s foodservice offer back home (and plenty have), and they’ll tell you it’s anything but easy—or nice. There are many layers to this onion, not the least of which is two decades of building customer trust.

And MacDougall, whose instinctual drive deviates from other industry execs’ hunger for metrics, believes even his robust food program is no longer enough.

“There’s nothing that you try that you don’t have some anxiety about,” he says of his white-suited crew. “But you have to try it. There’s nothing to being in the same place all the time. That’s even more so in the food business: You have to be different every day of the week.”

So while other retailers hem and haw over foodservice— seeking that magic number, anxious for results—Nice N Easy is setting a pace followed by few in the convenience channel.

But blazing a trail is not free of risk or regret. Is Nice N Easy overleveraging foodservice? Can it truly deliver a meaningful ROI in the hardscrabble terrain of upstate New York, where unemployment exceeds national averages and median income remains well below its New York City brethren?

A Forced Hand

You could say these chefs are lucky. They’ve walked into a c-store chain that already has an established foodservice presence. But it hasn’t come easily.

Facing everything from onerous taxation to high unemployment and tribal tobacco sales, c-store retailers in the Empire State, especially those upstate, must often find alternative profit centers. An aging population that’s shrinking in numbers isn’t doing retailers any favors either.

Nice N Easy, which MacDougall formed in 1980, began seeing foodservice as a major sales contributor in the company’s teens. Growth took time and patience, and a few key points on the timeline helped build a foundation that could eventually support three chefs on the payroll.

In the early 1990s, MacDougall noticed some of his franchisees were making notable foodservice inroads on their own. One had enlisted a consultant to help him build a from-scratch pizza program—largely unheard of at the time. “He was one of the first stores to get to $1 million in sales, which back then was pretty good, and one-third of his sales was just coming out of foodservice and pizza. That gets your attention,” says Fran Duskiewicz, the company’s senior executive vice president.

So corporate began researching how to offer its own from-scratch pizzas, laying the foundation for the robust program that remains a hallmark today. Other Nice N Easy franchisees were finding success with subs, even breakfast sandwiches; the company’s Egg on the Go that exists today stemmed from an entrepreneurial franchisee back in ’90s.

“They showed us that people were willing to buy it, and somehow we had overcome this hesitancy that customers may have had,” says Duskiewicz.

Elsewhere in the industry, c-store retailers were signing on with established QSR brands, rather than risking their own proprietary ventures.

But QSRs wanted to build walls between the c-store and their concept—literally and figuratively. That didn’t sit well with MacDougall, who saw in such arrangements labor inefficiencies, weaker customer service and, in some cases, sales figures that were below what he was already making.

“We learned a lot by breaking the rules,” says Duskiewicz. “There’s rules-rules and then there’s John’s rules, and I’ll go with John’s rules nearly any day.”

As the 1990s turned into the new millennium, the opportunity in foodservice grew more apparent, and the company began building operational processes and procedures. They developed a team of foodservice managers and assistant managers at each store, as well as field people. Relationships were built with foodservice suppliers, and protocol for costing, ordering and labor was instituted. A new store model was developed with dedicated foodservice space. Knowing he needed to instill a foodservice culture in his company, MacDougall hired two foodservice veterans. Glenn White, director of foodservice, was brought on in the mid-1990s, followed by Jack Cushman, senior vice president of foodservice, in 1999. Both had QSR experience, and Cushman boasted a doctorate in hotel, restaurant, institutional management and dietetics.

“[Retailers] say, ‘You’re a supervisor for a c-store—you run the food program,’ ” says Mac- Dougall. “You can’t do that. You have to reach out to somebody who really understands that business.” The formula for long-term foodservice success was now in place. Or was it? When Nice N Easy sought consumer feedback, the results came back—and they weren’t great.

“Our foodservice was kind of confusing. We didn’t have an overriding corporate foodservice image,” Duskiewicz says. A hodgepodge of brands was found from store to store, none of them particularly compelling. So they worked with a consultancy to come up with Easy Street Eatery and stamped it across every label, package, visor and shirt. The chain also began contemplating dinner. “A lot of the food was more impulse—get a slice of pizza, or an Egg on the Go,” Cushman recalls. “To me, there was so much foot traffic, we could totally build that evening business.” Pizza and subs were marketed as a dinner option, and the team started thinking bigger: What else could we offer for dinner? Do we have the capability to do that? What tools would we need? They started thinking about the chefs.

Calculating Foodservice

MacDougall is hesitant to describe how foodservice’s sales contribution grew over those two decades, particularly due to the “craziness that happens with cigarettes here.” But at every milestone—developing the programs, building the processes and procedures, hiring foodservice veterans, launching the Easy Street Eatery brand—foodservice climbed at least 5% as a percent of overall margin contribution.

In an industry that crunches numbers to infinity and beyond, determining foodservice metrics has caused a lot of migraines.

“This foodservice piece is on everyone’s mind: ‘We gotta do it, but we have no idea how,’ ” says Duskiewicz, who also serves as chairman of the NACS research committee. “We try to come up with some metrics, some benchmarks; there aren’t really even any of those that exist.”

On paper, Nice N Easy’s foodservice program looks like a separate business. Each store has two separate P&L statements— one for foodservice and another for the rest of the store. Each site has a retail manager and foodservice manager, both of whom are assigned sales goals and labor hours to work with based on sales history. Employees are cross-trained to help out when needed.

Nice N Easy has seen its foodservice sales grow in the double digits every year for upwards of a decade, though inflation and commodity costs have likely padded those gains some.

“If we could continue to get the 10% real growth on a regular basis, compounded—and I think it’s very possible to do—I would be more than content with that. On the store side (non-foodservice), if we can get real growth to be half of that, I would be happy with that, too,” MacDougall says. Again uncertain of the worth of sharing metrics in a category with so many variables, Duskiewicz shares the company’s October foodservice budget goals: 26% of sales, 46% of budgeted margin.

But Nice N Easy doesn’t measure itself again other c-store chains. Instead, it benchmarks against comparable QSRs. And things are measuring up nicely.

“If you take away the QSRs with drive-thrus and the free- standing QSRs, we’re actually beating every QSR concept that has the same tools we have,” says Cushman. “There seems to be no sense of patience in our industry for something like this,” says Duskiewicz. “We did not get to the point where we’re hiring chefs overnight; it’s been 20 years.”

The Top of the Pyramid

The chefs signify the latest progression for the company, a step marked by a new challenge that the existing team simply didn’t have the bandwidth for: creativity.

Nice N Easy’s foodservice team offered great experience in the business of running a restaurant, particularly QSRs. But “you’re not allowed to think outside the box when you’re with a QSR,” MacDougall says, “so getting guys to change horses and think outside the box with some new, creative stuff was a bit of a challenge.”

Thus, the chefs. MacDougall’s vision for Nice N Easy’s chef team drew inspiration from MacDougall’s wife, Elaine, who watches a lot of food TV. What struck MacDougall about the personalities on those programs was their sense of creativity and entrepreneurialism. “That’s their whole purpose in life—they create something new, become famous for something that nobody’s ever done before,” he says.

“[We had] to find people that had that type of background, experience and education and bring them in and turn them loose. Don’t mess with their minds—just let them do what they have to do.”

The chefs also help take Nice N Easy to what the team sees as the final stone in the foodservice pyramid: hospitality. It’s what sets restaurants apart from c-stores, what drives repeat business. It’s also why you’re not likely to see touch-screen ordering in a Nice N Easy store any time soon.

“When you bring in restaurant people and guys like these chefs, they’re using words like ‘guests’ [instead of customers],” says Duskiewicz. “That’s when you start reaching some kind of evolutionary fruition, when you really become a foodservice company.”

Men in White

MacDougall didn’t intend to hire three chefs. One ad went out, and all three chefs (along with many others) applied for the same job. Each brought a different set of skills and personality that yielded an environment none of them could deliver alone.

There’s Doug Walters, a farm-to-table, white-tablecloth type of chef. He was the executive chef at a high-end restaurant in Fayetteville, N.Y., when he started interviewing with MacDougall and his team. He impressed them with his beef-cheek ravioli—not a future Nice N Easy menu item, but certainly a cue to Walters’ skills. For Walters, Nice N Easy would be a new challenge: deliver classy, tasty meals at a c-store price. Walters is thus tasked with executing Mac- Dougall’s idea for a $6.99 home-meal-replacement line while vetting vendors and acting as a creative director.

With impressive sideburns and arms full of tattoos, Andrew Franco has cooked food everywhere from grocery chain P&C, where he developed home-meal replacements, to an Italian restaurant and a hospital. He’s been a whiz at giving salads, fresh-cut fruit and other grab-and-go items a makeover, moving between stores to train team members to follow the protocol.

David Haynes is a “trenches kind of guy,” preferring the kitchen to a desk or corporate kitchen. So it’s fitting he’s running R&D as well as Nice N Easy’s only full-service restaurant, the Easy Street Diner, in sleepy, 379-person Constableville. He’s refreshed the diner’s menu, adding pies and his award-winning Adirondack chili.

Haynes actually went to school for sculpture, discovered quickly that there’s not much money there, and opted to “explore the medium of food from an artistic standpoint.” He’s done everything from consulting to decorative pastry and 23 years as chef and restaurateur of a 1,500-seat inn in upstate New York.

The chefs all arrived at Nice N Easy with a sense of curiosity and a desire to escape the late nights and long weeks of being a restaurant chef.

“After you hit 42, it gets old,” says Walters.

“A convenience store doing what I do for a living and trying to marry the two? I couldn’t resist. It intrigued me as much as I must have intrigued these folks,” Haynes says with a laugh.

The past five months have not been without their challenges for the chefs, who are used to 12-burner stoves and a bounty of raw ingredients. But that’s what Cushman’s for.

“Jack says, ‘You just come up with the ideas; I’ll find the product.’ And so far he has been right there. I come up with a crazy idea and he’ll say, ‘Great, great I’ll figure it out,’ ” says Walters.

“It’s easier to get their ideas up here,” Cushman adds, reaching for the ceiling, “and then say ‘OK, let’s not use raw ingredients— let’s get someone who can do those steps for you.’ ”

Nice N Easy does not work with any c-store suppliers for foodservice. Instead, it enlisted a foodservice distributor, Deli Boy, and started the long process of getting on the radar of traditional foodservice vendors to gain access to product that was restaurant-quality but already at a level of preparation that was realistic for a c-store chain without a commissary.

Once the company started building volumes, vendors’ doors started opening, and now they’re knocking on Cushman’s door. Nice N Easy is Deli Boy’s top account.

“If you’re going to be serious about foodservice, you have to come to the realization that it’s a totally different business with totally different suppliers and a totally different approach to how you do business,” says MacDougall. “Once you get that in place, then you go out and find the people that can really put you in the foodservice business. But you’re not going to be able to find it through your c-store supplier.”

The lack of a corporate kitchen or commissary further shapes the personality of the program.

The chefs work from the stores, where most food is prepped in full view of the customers. They work hand-inhand with the employees, training them on presentation and consistency before moving on to the next store. In addition to the added buzz of three chefs in full regalia behind the line, the training has empowered an employee base that already had very low turnover. Franco has even taught them how a mise en place can be translated to a c-store, making the process of building a sandwich faster, more efficient and even interesting to watch.

“We were looking for creativity, but each of these three guys have become excellent teachers,” MacDougall says. “That’s what really drives a program—when your people have the confidence to know they’re doing the right thing.”

The Elephant in the Room

At the base of this evolution is MacDougall’s idea for $6.99 meals—entrees and two sides that are meant for customers to heat up and eat in the office or at home.

Sales have been promising at the two stores that have rolled out the meals, which are lined up in a walk-around, open-air cooler along with fresh fruit cups, yogurt, meat-and-cheese snacks, salads and whole produce. The cooler is adjacent to the sub and pizza make line, where most customers are already accustomed to going. A number of folks have figured out they can ask a sales associate to heat their meal up for them to eat in the stores’ small dining area, which also has free Wi-Fi.

Along with sticking to popular options—roast beef, lasagna, sausage, salmon—care is taken with presentation. A chicken breast won’t be paired with rice or noodles; that’s too plain. Instead, the chefs opt for wild rice and a colorful veggie such as red bell peppers. Sausage cut on the bias wasn’t selling well, so they’re trying out a link sausage to see if that’s more appealing.

MacDougall takes great inspiration from Wegmans, the Rochester, N.Y., grocery chain that owns one of the most celebrated supermarket foodservice programs in the country. The stores are overwhelming, with panini stations, footballfield- sized salad bars, Asian food bars and pizza in every form, from dough balls to take-and-bake pies and single slices.

Grocers have struggled to get home-meal replacements to really take off for decades, so the question of how a c-store chain can is unavoidable.

For the Nice N Easy team, that’s just it. “Wegmans is an Easter egg hunt,” says Cushman. “It’s not convenient, and isn’t meant to be.”

The most difficult challenge will be getting the word out. Nice N Easy has rolled out a series of TV ads with Mac- Dougall touting the chain’s coffee program and customer service. But there are many store models, and it’s difficult to promote something to a consumer who may not be able to find it in his or her neighborhood Nice N Easy.

So they’re relying on already-steady foot traffic and merchandising as advertising. A prominent, bountiful display of home-meal replacements, consistent day after day, says more than a sign ever would, MacDougall believes. This practice has helped build the chain’s fresh produce sales as well.

Perhaps surprisingly, MacDougall felt little pushback on the decision to hire not one but three chefs. Call it faith in MacDougall’s instinct, or another one of “John’s rules.”

“There’s always anxiety,” MacDougall acknowledges. “It’s expensive, the equipment is expensive, people are expensive and if you make mistakes they are expensive.

“But over time you learn how to adapt and how to take the cautious route in some ways, and you take your licking when you get beat up and you take your success when it comes to you.”

Duskiewicz, the number cruncher most likely to give pushback, knows that the potential is worth the investment.

And Cushman says, simply, “If you look at it in terms of the revenues and margins generated, this is not a drain on the company.”

“It sounded like a radical concept to some people,” MacDougall says. “But at the same time, I had confidence that I would learn something in the process, and we would learn about new products that we could generate and how you develop creativity.”

Growing Investments, Concerns

With talk of toques and indulgent sandwiches and how red peppers can make a dish pop, it’s easy to forget the reason for the chefs: The industry is changing, fast, and MacDougall is concerned.

“The big oil companies already know what’s going to happen,” he says, “and that’s why they’re getting out of the business. … We will have gas pumps in front of the stores, we’ll probably have liquidized natural gas as another product, or some other alternative energy source. But it will be different.

“Do I think that everybody’s going to be able to adapt to that? I don’t think so. I think the big guys who really know how to play the game will continue to do great things because they’re great companies and they understand where things are going. There’s a whole bunch of other people out there that either have to get on the boat or get off. And now’s the time, because the boat’s about ready to leave.”

MacDougall is also closely watching dollar stores. But instead of being on the defense, he’s looking at categories that dollar stores have excelled at—paper products, candy—and determining how to attack them himself.

Groceries are another growth category for the chain. Many Nice N Easy stores are in underserved areas, or “food deserts,” where the only access to fresh food is the local c-store. Earlier this year it established a supply network with a wholesale grocery distributor; now stores offer a range of ingredients based on local needs.

In perhaps an even bigger move than hiring three chefs, Nice N Easy was set to open a 6,500-square-foot store in October that will serve as a prototype for future builds. The larger footprint will include more seating and foodservice space.

As with the chefs, there are some jit ters over the new store. But MacDougall believes they must keep moving forward: “We’re rolling the dice that this is something that’s going to work.

“We wouldn’t have gone with it if I didn’t believe in my own heart that it was a good thing. We gotta try it, we gotta test it, because if it works as well as I think it can, then it opens up all kinds of opportunities for us anywhere you want to go.”

A Nice, Easy Future

Up next, MacDougall is tasking the chefs with evolving the chain’s breakfast program. He’s also looking at bringing in espresso machines to stores in suitable neighborhoods. Health and wellness is an ongoing topic for the chain, and there are plans to commission a dietitian to give all menus a “stamp of approval.”

Produce, home-meal replacements, dietitian-certified menus: Nice N Easy’s trajectory is a unique one. When asked what he envisions his stores to look like in five, even 10 years, MacDougall has an interesting image: “If you could be a Trader Joe’s and a Panera, the world would be at your feet,” he says. “If you took those two concepts and put them together in the same building, and boiled them both down a little bit, that’s what I want a Nice N Easy to look like.”

Whatever’s in store for the convenience industry, MacDougall isn’t allowing his company to be confined to it.

“It isn’t a technical business,” he says. “It’s a people’s satisfaction business, whether they’re the people who work for you or the customer who walks in your store. If you know how to take care of people and have them respect you and trust you, and believe in what you try to do, you have a pretty good chance.”

A Fickle Market

A server walks to the table, followed by a co-worker, this one blushing. “i’m sorry to interrupt,” the server says. “he’s too nervous to say anything himself, but he is a huge fan.”

“i love your stores,” the 20-something man gushes to John MacDougall, owner and ceo of Nice N easy. “your food is so good and you’re open all the time. it’s just the best.”

Later, at a Nice N easy store, Mac- Dougall stands chatting with a customer for a good 15 minutes.

“I have a lot of respect for you,” she says. “you go on tv, you make commercials getting chased by cows and turning blue in the face, and you probably have an MBa!” he smiles. “But i don’t!” Nice N easy has a strong following in its upstate New york communities, and MacDougall’s kind demeanor and endearing tv commercials—where he indeed gets chased by cows—helps generate customer loyalty. and yet the market still isn’t doing

Nice N Easy any favors. painful taxation, tribal tobacco sales and a shrinking population do not make for an ideal place to do business. “if i had my druthers, i wouldn’t be in upstate New york,” MacDougall says. “i love upstate New york for a lot of reasons, but if you specifically look at Nice N easy and look at our intentions to grow and how to grow, it wouldn’t be here.” Charlotte, N.c., sure would be nice, MacDougall thinks.

“If you took the Nice N easy concept to a big city, you could knock them dead,” he says. “it’s such a unique concept, and it’s about to get even more unique. But i think if you went to a population that was a bit younger, a bit more affluent, that had more time pressures that forced them to use convenience, then it opens all kinds of doors for you.”